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University of Miami Lays Off 800, Cuts Research Funding, Builds New Presidential Mansion

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Despite the trillions of dollars flowing through the US health care systems, prominent not-for-profit health care organizations seem to be complaining more often that the money going to them is not enough.

The Lay-Offs and Research Cutbacks

Recently, for example, the University of Miami announced that its medical center would have to tighten its belt. In April, according to the Miami Herald,

University of Miami President Donna Shalala announced Tuesday that the medical school will take 'difficult and painful but necessary steps' next month to reduce costs, including staff cuts.In a letter to employees, she called the cuts 'significant' but provided no details about how many employees might be laid off.

'The process will take place in stages, and affected employees will be notified during the month of May,' Shalala wrote. 'Reductions will not impact clinical care or our patients and will primarily focus on unfunded research and administrative areas.'

Shalala said the cuts were necessary because of 'unprecedented factors' including the global downturn of 2008, decreased funding for research and clinical care, plus cutbacks in payments from Jackson Health System. The Jackson reductions 'have had a profound effect on our finances,' she wrote.

Placing the blame for the medical school's financial problems on Jackson Health System, the local safety-net health system, did not sit well with that organization's leadership. In another Miami Herald story, its chairman stated that the real problem might be:

'investments that they have made that may or may not have panned out,' including the purchase in 2007 of Cedars Medical Center, across the street from Jackson Memorial, for a price that several experts say was far too high.

In fact, we discussed here allegations that the University of Miami Medical School's purchase of a facility that was renamed the University of Miami Hospital adjacent to Jackson was meant to take insured patients from that already struggling facility.

Nonetheless, the Medical School proceeded with its cuts, which resulted in 800 layoffs (see Miami Herald story here.) The next Miami Herald story suggested that the cuts would disproportionately impact worthy researchers, for example,

When Nobel Laureate Andrew Schally arrived in South Florida six years ago, he was greeted with great fanfare and named a distinguished professor of pathology at the University of Miami medical school. Now he says his work is one of the many casualties of the school’s budget slashing.

Schally says UM told him several weeks ago that his annual funding of $150,000 for research would end May 31, part of widespread cuts in the medical school that could eliminate up to 800 jobs this month and trigger major reductions in research.

'I was shocked... We developed so many drugs for the university,' Schally says. 'They are killing the goose that laid the golden egg.'

The President's New HouseThe headline of another Miami Herald story last week suggested that things had gotten so bad that the cuts were even going to affect top university leadership's lifestyle:

UM president’s house sells for $9 million

We had posted about University of Miami President Donna Shalala's lavish university funded living conditions a while ago. Now it seems she would be giving up

a guest room created specifically to host the Dalai Lama during His Holiness’ visits to South Florida.

So can we conclude that the University is really tightening its belt when its President is forced to move out of such a lush environment? Not really.

In fact, Ms Shalala may be moving to even more plush surroundings, courtesy the university's supposedly challenged budget:

The 32-acre Pinecrest development, built on land donated to the university by UM law grad-turned-philanthropist Frank Smathers Jr., exclusively houses UM faculty. Shalala will now join their ranks as both boss and neighbor.

Decades ago, the grounds were home to Smathers’ Arabian horses and world-renowned mango collection. The UM-built homes are clustered in the center one-third of the acreage 'to safeguard the botanical integrity of the estate,' according to the university’s website. The remaining land is dominated by lush plants and fruit groves, and is maintained by Fairchild Tropical Botanical Gardens.

In particular,

“It’s a very bold house,” Taylor said of Shalala’s new digs. “It’s a dominant house in the neighborhood.”

Taylor said the all-white exterior of the new home is a noticeable contrast to the more-earthy tones of other houses nearby. The university is calling it the 'Ibis House' after UM’s beloved (and also all-white) mascot.

Shalala’s new home will sit on a quarter-acre of land — dramatically less property than she enjoyed before. On the plus side, Shalala, just as in her old home, will enjoy about 9,000 or so square feet of interior space, and an in-home elevator connecting the first and second floors.

The new home is also situated in a unique gated community that offers a community clubhouse, tennis courts and pool, and meticulously landscaped gardens.

Was anyone really expecting that Ms Shalala would have to find her own housing, like the 99 percent have to?

SummarySo here we have another example of how the notion of CEO exceptionalism has filtered down from large for-profit corporations to even non-profit, ostensibly mission-oriented health care institutions. Leaders of health care organizations are now deemed to be so important, at least in the eyes of their hired public relations staff, that they must be given every luxury. Perhaps if housed in any space smaller than 9000 feet, Ms Shalala would be so confined as not be able to think great thoughts anymore, like how many layoffs would be needed to sufficiently cut costs. Worse, maybe without such free housing, she would just decide that the institution would not be showing enough gratitude, and so her amazingly brilliant leadership would have to seek new pastures.

Maybe, on the other hand, Ms Shalala's new house is just another demonstration how health care has become dominated by leadership whose own compensation and privilege seems to come before the mission., and sees no problem in asking for "difficult and painful" cuts from those who do the real work on the ground while building itself new mansions.

So as usual, it is time to say that true health care reform would foster leadership that upholds the core values of health care, and focuses on and are accountable for the mission, not on secondary responsibilities that conflict with these values and their mission, and not on self-enrichment. Leaders ought to be rewarded reasonably, but not lavishly, for doing what ultimately improves patient care, or when applicable, good education and good research.